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Perhaps I could cash the next 3 years at this level on one sale? That will make me $18000 today which I could use to improve my other websites and create more. The thing is that I´m sure the site will increase it´s earnings as is becoming very popular on it´s area, so I´m not sure on what to do! How much to ask, to sell or not to sell?
win win situation, there is a lot of pontential in the website and the new owner will certanly take advantage of it. I´m sure he will have ROI in a year and a few extra months. Now I´m going to use the cash to expand my current websites and hire some help. After this experience I´m also selling 2 other sites, they are not as big but in the right hands will cerantly make lots of money. With this cash I´ll make myself an authority on my niche,. Thank you all for the great feedback, beer´s on me folks.
It only goes to show that the price of a website is determined by market forces - the price you're willing to sell it for and the price someone is willing to pay for it. Due to the variety of factors involved, it is not fair to generalize that a website is only valued at 1X its annual revenue. You just showed that it isn't always the case. Again, congrats to you.
I've just discovered that due to my work visa changing that I have to sell my site. Well technically I don't have to sell it but I have to stop earning revenue from it so it seems better to sell it than to leave it as a non-income generating site.
Thanks again for the advice here.
A loss making business correctly positioned in the market ready for the next level of development could be of significant value as it has passed the start up phase and may be established for volume sales and have vast potential for the purchaser.
When agreeing a value:-
1. What is the Potential revenue capacity to someone else that can market the business more effectively
2. Is the domain/ brand worth anything?
3. Has it a data base of any information?, registered members etc
4. What would it cost to buy in traffic of the sites current level?
5. How long would it take to build a similar site and get position with it?
6. How many links has it got and how many pages are indexed by the search engines.
Recently a website business that was making an £8 million loss a year but turning over £1 million was sold for £7 million. Reason being that it had brand awareness a good membership base and had potential to do multi million turnover in the right hands. A quality site of the nature of this one would take time and serious investment to establish.
My understanding is that an idea of value could be based on the following formula:-
Annual Income X 1 +
Brand / Domain Value? +
Annual Traffic Value X 3 +
Data Base Value X per member +
Factor for potential revenue the site can achieve
Hence why a loss making web business or low turnover one that has got established pages and high traffic levels is worth a small fortune.
In conclusion i would say that, on the one hand, if a site is small time and only has small potential to do more, then a multipal of income, plus a bit for traffic is i guess fair enough for it. on the other hand, If a site has vast potential and is positioned well, has high traffic and is sought after, frankly its in a totally different league all together and the price falls down to what its worth to someone else!
Where's the best place to go to find legitimate sites that are for sale?
They claim to have handled the largest site sale this year ($750,000) and say that they have over 1 million domains for sale.
I've put their tracker on my web site so that I can have a third party (i.e. sedo) confirm my traffic claims as well as list me.
Hope this helps.